Congress May Give More Funds To Fraud Investigators


Members of Congress appear eager to provide fresh funding and possible new authority to law enforcement agencies pursuing fraud in the financial crisis, as government officials last week detailed efforts to counter rising abuses with already stretched staffs, reports the Associated Press. Mortgage fraud, which has spiked to record levels in the wake of the subprime loan collapse, is an intense area of focus by federal and state prosecutors. Mortgage fraud investigations by the FBI have more than doubled to over 2,000 in the current fiscal year, from 881 three years ago. Rep. Barney Frank (D-MA), chairman of the House Financial Services Committee, cited “a justifiable level of anger” among people suffering through a recession over deficiencies in the regulatory system that allowed financial misconduct to flourish.Rep. Bobby Scott (D-VA), noted that the FBI is conducting about 2,000 mortgage fraud investigations with only 240 agents. Nationwide enforcement sweeps against mortgage fraud brought criminal charges against more than 400 defendants last year. The mortgage industry saw a record number of fraud incidents last year, with the number of such reports in mortgage loans rising 26 percent from 2007. The FBI has more than 566 ongoing corporate fraud investigations, including 43 cases related to the financial crisis, said FBI Deputy Director John Pistole. The fraud caseload is straining the FBI’s limited resources for pursuing white-collar crime, he said.

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